Welcome….

This is the first post on this blog.

Minnesota is rich in blogs, and rich in alternative media such as The Uptake and Daily Planet.  Is another blog really needed?  Good question!   My main reason for setting it up is to have a place to archive and link to various emails and posts I’ve sent about Minnesota environmental issues. Continue Reading →

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The unending PolyMess ….

For about seven years various state and federal agencies have been doing “environmental review” of this project, the first of its kind to be proposed in Minnesota.   Mining industry people and their agents, including numerous Minnesota politicians of various parties, claim the proposed copper-nickel (sulfide) mining is the economic salvation of Northern Minnesota. The enviro side predicts disastrous pollution will result. Who is right?  Or does the truth lie somewhere in between? Officially the NorthMet Mining Project, the supposed plan is to dig up and process 240 million tons of this over a period of twenty years:

“The NorthMet Deposit is one of 10 known significant mineral deposits that have been identified within the 30-mile length of the Duluth Complex and just south of the eastern end of the Mesabi Iron Range. The complex is a well-known geological formation containing large quantities of copper, nickel, cobalt, platinum, palladium, and gold. The MDNR has estimated that the entire complex contains as many as 4.4 billion tons of mineral resources grading at 0.66 percent copper and 0.20 percent nickel. The NorthMet Deposit is believed to be the second largest deposit within the Duluth Complex and represents nearly 25 percent of the known mineral resources in the area.”

The Minnesota Department of Natural Resources (DNR), the US. Forest Service, and the US Army Corp of Engineers (the “lead agencies”) have produced the most recent environmental review report, a 2165 page “Supplemental Draft Environmental Impact Statement (SDEIS).”  In addition, the agencies have produce videos and “Fact Sheets” with generally cheerleading tones but factual errors.

The US Environmental Protection Agency had called a previous Environmental Impact Statement  “inadequate,” saying in a Feb 18, 2010 letter that the project may “may have substantial and unacceptable adverse impacts on aquatic resources of national importance.” In the runup to three recent public meetings, DNR Commissioner Tom Landwehr has done a frenzied road show, basically telling Minnesotans to see things through the same rose-tinted lens used by the DNR to evaluate mining projects.

The Duluth New Tribune lost its collective mind in one of the most insulting editorials I’ve ever seen in a mainstream newspaper.  Making copper mining happen seems central to the political agenda of Governor Mark Dayton.  Dayton has gone so far as to say he’d like to see the US Environmental Protection Agency abolished.  See Carol Overland’s Legalectric post on this. This is an issue on which many Minnesota NGO’s have been able to focus effectively.

Good information is available on the sites of Audubon, WaterLegacyMining Truth, and many others. Many people have studied the SDEIS in more detail than I have, and have identified many deficiencies.  I’ll just add a few thoughts.

The public hearings on this are inadequate and orchestrated.  Look at this about the last–presently scheduled–hearing in St. Paul on Jan 28th “Because of limited time, moderators will pick 60-80 names at random to deliver oral comments of up to 3 minutes in the large auditorium between 6:45 and 10:00 PM.”   This is a shameless attempt to limit public testimony.  Instead, the hearing should be continued on as many evenings as necessary until everyone has had a chance to talk.  In the previous cycle of public comments in 2009, the DNR got attention for refusing to let people testify in public at all.  I wrote this up at the time:”PolyMet, manipulation, and public meetings/hearings.”

According to the Minneapolis Star-Tribune, about 640 people signed up to speak on the 28th but only 59 were allowed to. State regulatory agencies like the DNR and MPCA can’t deal effectively with politically connected industries like mining in Minnesota.  (Or garbage-burning in Minnesota, or agriculture in Minnesota, or ….).  This is why the supervision of federal agencies is so important–they can be more insulated from state-level politics and help maintain the integrity of the process.  So how this current cycle of environmental review will depend a lot on whether the federal agencies, especially the EPA, again do their jobs, or whether they roll. In 2010 EPA called out “substantial and unacceptable adverse impacts on aquatic resources.”  Has anything changed to alter that conclusion?  I doubt it, because (1) the essential characteristics of the project haven’t changed, and (2) the “modeling” of water pollution impacts seems to be based on incorrect baseline data on how much water will flow through the site.   This casts doubt on the validity of all the predictions of how pollutants in nearby surface waters would change.  A good writeup of this here:  “Study may need major fix.”

The Native American tribes/bands/organizations  involved in the effort have identified 18 official “Major Differences of Opinion.”  They of course, “were here first,” and remain more closely connected to the lands and waters of the area.  They apparently have been pointing out the problems with the water flow baseline for some time.  Many of their “differences of opinion” seem like no-brainers.  Number 17 says:

“Fond du Lac and Grand Portage do not agree with statements in the document that indicate there is “no impact” when that assertion is based on not exceeding an evaluation criteria. They believe the SDEIS should acknowledge where there is a change, regardless if a criteria or standard is exceeded. With regard to the water quality effects analysis, Grand Portage and GLIFWC note that evaluation criteria are not equivalent to water quality standards. Grand Portage further notes that some evaluation criteria are high enough to cause human health impacts and evaluation criteria are not equal to or a substitute for water quality standards compliance. GLIFWC notes that in some areas, for example the cumulative effects section for the Partridge River, the text states all water evaluation criteria would be met, though water quality standards would be exceeded for several constituents.”

In other words, the “lead agencies” are simply cooking the books on water pollution.

Why, after about seven years of environmental review work, is the news so bad.  Simply because the news IS what it is.  There is no way such an operation, as the mining industry would run it, can avoid causing major problems.  The key reason:  the ore and some of the overburden contain sulfur.  When this is broken up, and exposed to atmospheric oxygen and moisture, sulfuric acid (H2SO4) is formed.  This dissolves other harmful constituents from the rock and directly adds sulfates (SO4) to the water.  Billions of tons of material are involved, so the “reactive” rock would cause mischief for hundreds or thousands of years.

So why are Governor Dayton, many members of the Minnesota Legislature, and others, pushing so hard for this?  Officially, “jobs.”  According to the SDEIS, Polymet claims the jobs created would be: Construction:  500 direct jobs plus 332 indirect jobs.  Total 832 Operation: 360 direct jobs plus 631 indirect jobs.    Total 991 Yet, these apparently are Polymet’s numbers and most likely exaggerated.  And they don’t mention the jobs that might be lost in other industries such as recreation and tourism.

The Current Population Survey of households showed 2,834,248 employed persons in Minnesota for December, 2013.  Minnesota added 9,500 jobs in December 2013 according to the CPS employment measure or 5,901 by the Current Employment Survey (The two surveys use different methods). To simplify, lets assume there are three million jobs in Minnesota and PolyMet generates a net of 500 more.  Then PolyMet would provide 0.017 percent of the jobs in Minnesota.  About equal to the number Target is laying off at its corporate headquarters.  Granted these jobs are very important to the people who need them, and 500 jobs on the Range are likely harder to come by than 500 jobs in the Cities.  But how much sense does it make to bring in a facility with a very high probability of crapping up a sizeable chunk of Minnesota, and perhaps increasing pollution of Lake Superior, to increase employment in Minnesota by 0.017 percent?

How reliable are the pollution numbers and other numbers in the SDEIS? The documents say the “Life of Mine” would be 20 years and the plant would process 32000 tons per day of ore.  But what is to ensure that the operation would shut down after 20 years?  Nothing, in my opinion.  This is not any more likely than that Minnesota’s nuke plants would shut down at the end of their 25 year licenses.  No reactor in the US has ever been denied a license extension.    As long as there is copper-nickel or to be dug up profitably, activities are likely to continue.

A more reliable source that the SDEIS and its predecessors may be a report on Polymet by Edison Investment Research Limited.  Edison claims to be “Europe’s leading independent investment research company …” and has an office in Toronto. Edison says “PolyMet Mining Corp. is a research client of Edison Investment Research Limited.” I think this means PolyMet pays Edison to promote Polymet to investors. It seems likely that the information in this report is what PolyMet want to pitch to investors.  The report says:

“We look for management to create additional value through expanding capacity or consolidating the Duluth Complex. In addition, we believe PolyMet might be able to optimise NorthMet’s ore processing rate while staying within the permitted emissions level.”

Our base case valuation is US$479m or US$1.49/share undiluted or US$1.32/share diluted. Our DCF valuation uses a 10% discount rate, a 20-year mine life and long-term price assumptions of US$2.96/lb for copper and US$10.14/lb for nickel. We assume a US$450m capital cost with US$100m financed with equity at US$0.85/share and US$350m funded with debt. No value is ascribed to the unused resource.

Our upside valuation, based on an expansion to 90,000 t/d [emphasis added] at an additional capital cost of US$400m, is US$1,254m or US$3.89/share undiluted or US$3.08/share diluted. Sensitivities: Permitting is key The important issues facing PolyMet are: permitting, geology, commodity pricing, access to capital and project execution. PolyMet is a junior development mining company… (“A junior mining company has no mining operations and is essentially a venture capital company.”)

PolyMet acquired the Erie Plant from Cliffs Natural Resources in transactions in 2005 and 2006 for US$32m. This materially reduces the capital cost to build NorthMet and shortens the required construction time.

NorthMet will start with a volume of 32,000 t/d (short tons), but historically the plant operated at 100,000 t/d and we believe an operating rate of at least 90,000t/d should be attainable [emphasis added].

PolyMet will be an open-pit mine. Run of mine rock will be delivered to a loading system, loaded onto rail cars and delivered to the Erie Plant six miles to the west. PolyMet will mine approximately 32,000 tons of ore per day in Phase I. It will have a life of mine stripping ratio of 1.4 to 1.0, but will start out with a very low stripping ratio the first several years.  [This means that for every ton of ore dug out, 2.4 tons of material will have to be moved, including the ore and the overburden.]

Waste rock with the lowest sulphur content will be placed in a stockpile with a ground water containment system. The remaining waste rock will be temporarily placed on foundations, liners and containment systems, then backfilled into the pit for underwater storage. Ore will be transferred from rail cars into crushers formerly used to crush iron ore. Once the ore is crushed to 0.5 inches it will be further ground in rod and ball mills, reducing it to 120 microns. The finely ground ore will be sent to new flotation cells that will separate the metal-bearing rock concentrate from non-metal-bearing rock (tailings). The flotation circuit will produce separate copper and nickel concentrates. Tailings will be collected from the flotation cells and sent to the existing tailings basin. Five years of testing have shown these tailings will not generate acid. The metals are separated into concentrate to be sold for further processing. … 

Initial annual production of Phase I is estimated at 72m pounds of copper, 15m pounds of nickel and 106,000 ounces of precious metals. Based on the economic  summary in the 2013 updated 43-101 Technical Report, NorthMet will have a cash cost of US$1.05 per pound of copper based on co-product economics and a negative cost of US$0.28 per pound of Copper based on byproduct economics. [copper now sells for around $3.25/pound but prices are highly volatile.)

The Erie Plant provides PolyMet with a competitive advantage. The Erie Plant is a large grinding and milling facility with a tailings pond. The plant includes two rail dump pockets, two primary 60" gyratory crushers, eight secondary 36" gyratory crushers, seven tertiary standard cone crushers, 14 seven-foot short-head crushers, 30 mill circuits each comprising one 12' x 14' rod mill, one 12' x 14' ball mill, three 12' x 24' regrind mills and maintenance facilities. It also has conveyors, feeders, bins, auxiliary facilities and a 225MVA high-voltage electrical substation, with a water supply, road, tailings basins and rail facilities. It owns a 120-rail car fleet, locomotive fuelling and maintenance facilities, and water rights. The Erie Plant operated from 1957 to 2001, processing taconite, and was shut down in the bankruptcy of its owner, LTV Steel Mining Company.

The existing Erie Plant has a historic capacity of 100,000 t/d, comprising four-stage crushing and 34 mill lines, each with a rod mill and ball mill. Cliffs operated the plant on behalf of the owners, processing 100,000 t/d of taconite ore. In the mid-1980s the consortium was consolidated into a single owner, LTV Steel.

The plant is in good physical condition and operated at or near full capacity prior to its closure. PolyMet has not operated the plant, but has examined it in detail and believes the mill is serviceable. PolyMet plans to use one of two primary crushers and one-third of its historic capacity (32,000 t/d) to treat the material mined from the NorthMet deposit in Phase I.

We believe management may optimise the potential of the plant in Phase I while staying within the permitted emissions level. [emphasis added]  We believe it could achieve a 20% to 30% increase in throughput while deploying minimal additional capital, which should enhance the project’s economics.

Phase II will further treat the milled nickel concentrate. The concentrate from the flotation cells will be put into a large pressure oxidation vessel called an autoclave. Oxygen will be added to create a chemical reaction with the nickel concentrate. Heat generated by the exothermic reaction and high pressure will drive the metals into solutions. Metals, including nickel, cobalt, platinum, palladium and gold, will be precipitated out of the solution and sold as semi-finished products: nickel-cobalt hydroxide and precious metal precipitate. Limestone will be added to the excess solution to neutralise acidity. This will create synthetic gypsum that will be stored in a lined facility. [Sounds like some serious potential for pollution here....]

The NorthMet resource

The NorthMet copper-nickel-PGM ore body is near a number of shut-down iron ore mines and the operational Peter Mitchell open-pit iron ore mine is approximately one mile north. The NorthMet ore body comprises 275 Mt of proven and probable reserves grading 0.79% copper equivalent with measured and indicated (M&I) mineral resources of 694 Mt grading 0.74% copper equivalent (Exhibit 2). We believe the size and scope of the ore body could support a much larger project, which would create meaningful additional value.  [Now we are getting to why the SDEIS does not capture the real impacts ....]

Potential resource expansion

We believe there is a good chance PolyMet will be able to expand the size of its resource by 50-100% based on what we learned on a site visit. [emphasis added]  The eastern end of the pit is cut off by the property boundary with the Teck-Mesaba project. However, down dip to the south and west the geology is open (Exhibit 3). Also, based on drill work to date there is a chance PolyMet will be able to identify economic mineralisation on the hanging wall and at depth. Expansion to 90,000 t/d Phase I is designed to operate at 32,000 t/d, which uses 32% of the Erie Plant capacity. Based on rule-of-thumb estimates, the capital cost of expanding to 90,000 t/d would be approximately US$400m. Expansion would require additional environmental review and permitting. We have assumed it would take two years to secure permits and one year to expand the mine to 90,000 t/d and update the mill. It operated at 100,000 t/d previously, so a 90,000t/d rate would leave a 10% cushion; the NorthMet deposit is large enough to support the larger capacity. We assume PolyMet would restructure its debt to fund the capital for the project and that it would begin working on permitting the expansion project within six months of receiving its permits for Phase I. On this basis it could complete its expansion by Q218. Third-party processing There are roughly 11 mineral properties within shipping distance of PolyMet’s mill.

We believe there is a good chance PolyMet will decide to toll process third-party ore or form some relationships with one or more the local projects. We believe government permitting agencies may encourage the developers of other mining properties in the area to work out an arrangement with PolyMet to use its pre-existing mill and tailings pond. This would limit the footprint of mining and processing in the area.

Like the expansion case, we believe it would take two years to permit the expansion of the mill and one year to complete the mill modernisation. But since we do not know the grade of the ore to be toll processed or its metal composition we cannot model the potential contribution a third party relationship may have. We believe eventually the copper-nickel-PMG properties in the Duluth Complex that are close to the Erie plant facility may consolidate under PolyMet.

Potential future permitting of throughput expansion up to 90,000 t/d

We assume PolyMet would begin working on permitting the expansion to 90,000 t/d within six months of receiving its permits for Phase I, permitting would take two years and construction would take one year. On this basis, it could complete its expansion by May 2018.

Ok, this is a bit long and tedious, but suggests that the scenarios laid out in the SDEIS are low-balls, not representing what will really happen in the genie is let of out the bottle.  Plainly, much more comprehensive studies are needed.
How much is this mine “needed?”  One of purposes of environmental review under both federal and Minnesota statutes is supposed to be consideration of alternative to the proposed project.  In practice this is rarely done in any meaningful way, and it has not been done in this matter.  But Paula Maccabbee of WaterLegacy has produced “RECYCLING OF NON-FERROUS METALS–AN ALTERNATIVE TO SULFIDE MINING IN MINNESOTA.” Take a look.
According to the DNR,  Comments will be accepted until 4:30 PM CT on Thursday, March 13, 2014.  NorthMetSDEIS.dnr@state.mn.us
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Martin King’s birthday

In  the 1980′s I was working as a consultant to the engineering department of a large chemical company.  Like many US corporations around that time, they had looked at the the changing demographics of the US population and figured out that their future workforce couldn’t be all white and all male.  White people were going to be a decreasing proportion of the population. and their just wouldn’t be enough of them.   So they needed to change their corporate culture enough that black and brown and yellow and female people would find it acceptable.  This, in corporate-speak, was called something like “celebrating diversity.”

In practice this meant hiring consultants to put on “diversity” programs and meetings.  The majority of people working there probably understood the point, and were supportive or at least accepting.  But some were not, and this is hardly surprising.  After all, the culture was not only “white,” but Southern, “conservative,” Republican, and upper-middle-class.  Many had grown up, as did I, seeing “Martin Luther King is a COMMUNIST” billboards.  Having been taught all their lives to dislike, if not to hate, King and what he stood for, it’s not surprising they felt betrayed by their managers’ change of tune.

What was the fundamental beef with King?  That he was uppity.  That he asked for too much.  That he was unreasonable.  That he wouldn’t take “no” for an answer.  Above all, that he was do damn charismatic and effective.

At my client’s offices, I had this to say:  Honoring the trouble maker King, 20 years safely dead, doesn’t take a lot of courage.  Deceased troublemakers mellow with time.  The real test of our sincerity in supporting the righting of   injustice is how we are treating the troublemakers who are active NOW.  Who are the annoying Black leaders active at the moment and how can we support THEM?

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Minnesota’s “Legislative Energy Commission” vs public participation

The Minnesota Legislature has a “Legislative Energy Commission” (LEC) made up of Senators and Representatives. The law establishing it says:  “The commission shall continuously evaluate the energy policies of this state and the degree to which they promote an environmentally and economically sustainable energy future.” Continue Reading →

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Minnesota agency comments on EPA Region 5 climate change draft report…..??

The US Environmental Protection has laid out a  Draft Region 5 Climate Change Adaptation Implementation Plan (draft dated September 18, 2013)  and is accepting public comments through January 3, 2014.

For whatever reason, I just found about this yesterday.  Apparently, no effort has been made to alert the public, although NOTHING is more important to our future than climate change.  (Of course, we are having a cold winter, but that’s weather, not climate.)

The Minnesota Pollution Control Agency has been preparing comments.

I lack confidence in the PCA’s management to address this issue, mainly because of a disgraceful rulemaking in 2012, in which the breakpoint for regulating carbon dioxide was raised from 100 tons to 100 thousand tons.  More on that here.  More also from Carol Overland at Legalectric.org  Lots of people objected, but it seemed to be one of those “done deal” situations.  The Administrative Law Judge, Miguel Cervantes, seemed to be hearing the arguments, but–suspiciously, in my view–the order upholding the PCA’s indefensible position was signed by a different ALJ, Eric Lipman.  Neither the PCA or the Office of Administrative Hearings covered itself with glory….

Some rumors have circulated that MPCA staffers developed stronger, more substantial comments than the PCA’s management plans to submit.  There would be nothing surprising or unusual about this if true.  The PCA is a politically controlled bureaucracy and most politicians respond primarily to the short-term agendas of industrial interests.  Certainly Governor Dayton seems to.

But consider:  We are at a critical point in history and how we react, or if we react in advance, to climate change will have a big impact on our children and their children….  The only way to get real “value” from environmental regulatory staffers is to have technically and ethically competent, motived people and let them do real work, protected as much as possible from censorship and retribution.

With this in mind I sent in the following information requestto the head of the MPCA, and similar requests to MDH and DNR.

Dear Commissioner Stine:

It is my understanding that EPA Region 5 is accepting public comments on the Draft Region 5 Climate Change Adaptation Implementation Plan (draft dated September 18, 2013) through January 3, 2014.  It is also my understanding that the MPCA and perhaps other Minnesota agencies have been working on comments.

Pursuant to the MN Data Practices Act, I request copies of all comments and related correspondence, including all versions of all drafts of comments/proposed comments.

If this request raises any questions please contact me.

Yours very truly,

Alan Muller

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Passing of Mandela

The passing of Nelson Rolihlahla Mandela reminds us of the difference one inspired individual can make. And the courage and determination needed. Mandela was imprisoned for “conspiracy to overthrow the government” for 27 years and reportedly was on a US “terrorist” watch list until 2008.

This is from Bobby Peek, a leading South African environmental justice campaigner: Continue Reading →

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NRC Nuclear nonsense hearing in Minnetonka December 4th

Nuclear Regulatory Commission “Waste Confidence” public meeting December 4.

Minnetonka, Minnesota
Minneapolis Marriott Southwest
5801 Opus Parkway
Minnetonka, MN 55343

Open House
6:00-7:00 p.m. CST
Meeting
7:00-10:00 p.m. CST

This meeting (apparently it is not a formal public hearing) was originally scheduled for October 17th but postponed due to the federal government “shutdown.”  Previous meetings have had a three-minute time limit for speakers.  “NRC staff will not be available to answer questions related to the proposed rule or DGEIS during the formal meeting.”   (But they will at the Open House.) Continue Reading →

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Comments I sent in on the current funding cycle of the Xcel “Renewable Development Account”

I’ve been looking a the Xcel Renewable Development Account (commonly called the Renewable Development Fund“) and it has a pretty sad history.   Very little good has come of it and much money has been wasted that could productively have been invested in conservation/efficiency projects.

Examples: Ten million or so went to the promoters of a new coal burner on the Range–because of the machinations of the politically connected Tom Micheletti.  Not only was this money totally wasted, but people had  to devote lots of time and energy to fighting permits for the scheme (Excelsior Energy/Mesaba Project.  Carol Overland is the expert on this.  I seem to recall a hearing in Hoyt Lakes, in an unheated hockey rink in January, and not being allowed to finish my questioning of the technical witnesses…..) Continue Reading →

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Permanent shutdown of Vermont Yankee nuke plant announced–Monticello should be next

Xcel’s Monticello nuke plant deserves the same fate, ASAP

This is significant to Minnesota as Vermont Yankee is similar in age and design to the Monticello nuke and also to the four destroyed Fukushima-Daiichi reactors that seem to pose an expanding threat with the passing of time.  (VT Yankee is a couple of years older, slightly smaller and has had more high-publicity scandals.) “Fukushima radiation leaks reach deadly new highExposure to emissions would be fatal within hours, say Japanese authorities, as race to build frozen wall begins. Continue Reading →

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“Burning garbage: Bad for children”

Nice piece by Lara Norkus-Crampton on the harm done by burning garbage:

http://southsidepride.com/2013/08/articles/Burning-garbage-bad-for-children.html
Burning garbage: Bad for children

BY LARA NORKUS-CRAMPTON, RN

A new study from the Harvard School of Public Health links autism to air pollution. Their conclusion: Women in the U.S. exposed to high levels of air pollution while pregnant were up to twice as likely to have a child with autism as women who lived in areas with low pollution. Continue Reading →

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Documents about the proposed wood burner in Phillips neighborhood, Minneapolis, Minnesota

The project, thankfully, is dead, but discussions of it keep coming up.  So I’m using this post to link to some relevant documents:

A set of letters endorsing the project, from R. T. Rybak, Mayor of Minneapolis, the Minneapolis Park Board, Clean Water Action, and others.

A PowerPoint presentation by yours truly:

“Saying “NO!” to permits for ‘Midtown Eco Energy’”

A summary of projected emission from the project, also by Muller.

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